reports?
A) CEO B) Plant managers
C) Sales territory managers D) Current shareholders
Answer: D
58) Which of the following types of accounting is designed to meet the needs of decision-makers inside a company?
A) Managerial accounting B) Tax accounting
C) Audit accounting D) Financial accounting
Answer: A
59) The primary goal of managerial accounting is to provide information to
A) shareholders. B) internal decision-makers.
C) creditors. D) both shareholders and creditors.
Answer: B
60) Which of following is TRUE?
A) Management accounting focuses on historical transactions.
B) Financial accounting focuses on future data.
C) Financial accounting uses the cash basis for recording transactions.
D) Management accounting focuses on relevant data.
Answer: D
61) Which of the following statements is FALSE?
A) Financial accounting provides external reports.
B) Financial accounting provides sufficient information for managers to effectively plan and control
operations.
C) Financial accounting helps investors make decisions.
D) Financial accounting reports help creditors make decisions.
Answer: B
62) Which of the following is TRUE?
A) Managerial accounting reports must follow GAAP.
B) Managerial accounting reports aid potential investors.
C) Managerial accounting reports are audited by professional accountants.
D) Managerial accounting reports provide detailed internal information.
Answer: D
63) Which of the following are the internal decision- makers of a company?
A) Vendors B) Shareholders C) Customers D) Managers
Answer: D
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64) For a publicly traded company, which of the following reports must be audited by an outside agency?
A) Annual financial budgets B) Monthly financial statements
C) Annual financial statements D) Budgets
Answer: C
65) Which of the following groups are most likely to use a company's budget information?
A) Customers B) Suppliers C) Creditors D) Managers
Answer: D
66) Owners of a company are its
A) customers. B) shareholders. C) creditors. D) managers.
Answer: B
67) Information for external parties about past performance is provided by
A) budget reports. B) planning reports.
C) financial accounting reports. D) managerial accounting reports.
Answer: C
68) In what way do managers benefit from the use of a management information system?
A) Managers can store old documents in hard copy.
B) The managers could combine or adjust data to answer the questions from particular internal and external
users.
C) Data can be entered at numerous input terminals within the organization.
D) The managers would not be completely responsible for the information that is entered into the database
system.
Answer: B
69) Managerial accounting (select all that apply)
A) reports include detailed information on the various operating segments of the business such as product
lines or departments.
B) must be audited by an independant auditor.
C) must comply with IFRS/ASPE.
D) focuses on the future and includes activities such as preparing next year's operating budget.
Answer: A, D
70) Financial accounting
A) must comply with IFRS/ASPE.
B) is prepared for the use of department heads and other employees.
C) reports include detailed information on the various operating segments of the business such as product
lines or departments.
D) focuses on the future and includes activities such as preparing next year's operating budget.
Answer: A
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ESSAY. Write your answer in the space provided or on a separate sheet of paper.
71) Discuss at least four differences between financial accounting and managerial accounting.
Answer: Item Managerial Accounting Financial Accounting
Primary Users Internal Users
External Users (shareholders,
creditors and regulators)
Purpose of Information
To help managers plan, direct,
control and make decisions
To help external users make
investing and lending decisions
Primary Product
Any internal report deemed
worthwhile by management Financial Statements
What must be included/how it
should be formatted Determined by management
Standards must be chosen, IFRS or
ASPE
Underlying basis Focus on the future Historical transactions
What information characteristic
is emphasized Relevance Reliable and objective
Business unit Segments of the business The company as a whole
Frequency of reports Determined by management Annually and quarterly
Verification No independent audits required
Publicly traded companies must be
audited by independent CPA
Required by outside agency No Yes - securities commissions
Concerns over the impact on